H&M shares slumped Friday as the Swedish retail chain missed expectations for sales growth in a quarter in which it said it focused on profitability.
H&M stock
HM.B,
dropped 4% in early action, though it has rallied 47% this year.
In a brief statement, H&M said fiscal third-quarter sales in local currencies was “flattish,” missing analyst estimates for 5% sales growth. It said its goal of reaching a 10% operating margin next year “is going in the right direction” and that profitability and inventory levels have been priortized in the quarter.
Analysts at RBC said weather may have dampened sales, but that it also has become more expensive this season — for instance, pricing 10% below average in the U.K., versus 20% traditionally. Its publicly traded rivals — Inditex
ITX,
the Primark unit of Associated British Foods
ABF,
and Next
NXT,
— have each reported stronger sales growth.
The broader tone in European markets was positive, except for tech stocks, with ASM International
ASM,
shares losing 5% and ASML Holding
ASML,
down 2%.
The French CAC 40
FR:PX1
led the major regional indexes with a 1.3% rise, as the U.K. FTSE 100
UK:UKX
and German DAX
DX:DAX
also rose. Better-than-expected Chinese retail sales figures helped Paris-listed luxury plays.
Stellantis shares
STLAM,
fell 1% as the United Auto Workers began a strike at an Ohio plant, along with one plant each at fellow Big Three automakers Ford and General Motors.